Transcription

2 Contents Types of assets Investment options Choosing an investment option About this Guide This Guide provides you with information about Telstra Super s investment options, including Telstra Super s MySuper arrangement, the different types of asset classes and member investment choice and also explains how diversification helps to reduce investment risk. For information about the cost of managing your investment refer to the Fees and other costs section of the Additional Information About Your Super Guide. When reading this Guide, keep in mind how you invest your super depends upon your attitude to risk, the number of years you have until retirement and your own financial plans. As you move through different stages in your life, your financial needs will change, so too will your appetite for return and your tolerance for risk.

3 Risks of super Labour standards, environmental, social and ethical considerations Stay informed Telephone Facsimile The information in this document forms part of the Product Disclosure Statement (PDS) for Telstra Super Corporate Plus dated 1 July 2016 and Telstra Super Personal Plus dated 1 July You should read the information in this document (which forms part of the Product Disclosure Statement) before making a decision. The information in this document is general information only and does not take into account your personal financial situation or needs. You should obtain financial advice tailored to your personal circumstances before making an investment decision. Telstra Super Pty Ltd. is a registered trademark in Australia of Telstra Corporation Limited. Telstra Super Pty Ltd ABN , AFSL is the Trustee of the Telstra Superannuation Scheme (Telstra Super) ABN and is referred to throughout this Product Disclosure Statement as the Trustee, our, we or us. Telstra Super MySuper authorisation number Page 3

4 01/ TELSTRA SUPER INVESTMENT GUIDE 01/ Types of assets Investing is not as complex as it may seem, especially once you understand what makes up an investment and a few simple investment principles. What makes up an investment? There are two major types of assets that make up the building blocks of an investment: growth assets and defensive assets. These are outlined on pages 4 to 5. It is also important to understand the consequences of timeframes around investing. For example, many growth and higher risk assets show higher volatility over the short term with higher gains over the long term. Defensive assets (sometimes called financial assets) carry less risk over the short term and generally will not produce higher gains over the long term. However some investments, such as our exposure to opportunities, have characteristics of both growth and defensive assets (see page 5). To help you invest in the assets that best suit you, we offer a range of investment options that invest in both growth and defensive assets in varying percentages. Both growth and defensive assets have different levels of risk and return. Growth assets Growth assets include shares and property that earn income from dividends, rent and any increase in value from capital gains. Capital gain is the rise in an asset s value, which means that the total value of these investments can actually grow in the long term. However, it is important to know that the total value of these assets can be volatile, that is, they can rise and fall dramatically in the short term. For example, you may have noticed how the share price for a company can vary dramatically each day. Shares (equities) Shares represent ownership in a company and are often referred to in investment terms as equity. They can generally be bought and sold on the stock exchange and offer the opportunity for high returns, but also the potential for high risk. Shares (Direct Access) The Direct Access investment option gives members the opportunity to invest in any company listed on the ASX300 index and other listed securities such as Exchange Traded Funds (ETFs), approved by us. For more information see the Direct Access Product Guide available at Property A property investment can provide rental income and the prospect of growth in value over time. The three main areas of property investment are commercial property (e.g. office buildings), retail property (e.g. shopping centres) and industrial property (e.g. factories). Investments in property may be direct (as above) or via property trusts, which are made up of many smaller investors who pool their funds to enjoy the same benefits as a single large investor. Private Equity Private Equity is investment in predominantly unlisted companies through a negotiated process. The money invested is generally used to expand or develop the business. Private equities present opportunities to invest in undervalued businesses, Page 4

5 which may in turn create higher returns than investments in listed companies, but comes with a higher level of risk. A return on your investment is received when a private equity manager sells or revalues a business they have invested in using your capital. Defensive assets Defensive assets include Fixed Interest and Cash, and they earn returns primarily from interest. This means that assets usually provide lower risks due to fixed repayments, but returns are also likely to be low over the long term. For example, when you put some money aside in a term deposit with a bank, you may not be getting the highest interest rates around but you know that after a fixed period, the bank will pay you a pre-determined interest rate and return your investment amount to you. Fixed Interest Fixed Interest can be bonds and other debt securities issued by a government or corporation (sometimes referred to as credit). Credit (as explained below) forms a significant part of this asset class. If you invest in Fixed Interest, you lend money to the issuer who promises to make regular interest payments with full repayment on an agreed date in the future. Credit Credit is issued by both domestic and international corporations in the form of bonds that carry a rating from credit rating agencies. The primary focus of credit is to gain exposure to investment grade bonds, although holding below investment grade bonds is permitted in limited circumstances. Credit forms a significant part of the Defensive Growth option (see page 11). Income Securities These are debt securities that provide a relatively high income yield that is floating in nature. These securities are known for their defensive qualities and protection in rising interest rate environments. These securities are issued by corporations and other nongovernment borrowers, and include hybrid securities, which are listed on a stock exchange and pay regular coupon income, as well as mortgages secured by real property. Mixed assets Hedge Funds, opportunities and infrastructure possess characteristics of both defensive and growth assets. Their classification may depend on their underlying investment strategy and/or the stage of their life cycle. Hedge Funds Hedge Funds are managed funds that trade securities with the aim of generating absolute returns to investors in both a rising and falling market. Hedge funds provide the potential for stable and consistent returns and acceptable levels of volatility, as well as the potential to grow in the medium to long term. Opportunities Investment in opportunities provides the ability to capitalise on one-off market opportunities as they arise. These investments are not directly aligned with one specific asset class and generally offer a return in the form of interest, however in times of a market downturn they may also offer some potential capital growth. Examples of this could include structured credit, high yield corporate bonds or bank loans. Infrastructure Underlying mature infrastructure assets generate stable (and often regulated) long-term income streams for investors. These returns are considered a lower investment risk, compared to investing in early stage infrastructure projects encompassing the development phase of the infrastructure assets. Roads, bridges, power stations and water supply are infrastructure items that form the groundwork for economic production. Infrastructure investment can be accessed through listed managers or unlisted managers and provide stable cash flows. Asset class volatility The general nature of investment markets causes investment returns to fluctuate over time. Influences such as world politics, demand and both domestic and global economies all influence returns on investment. Due to these factors some asset classes tend to fluctuate to a higher degree and more frequently than others. For example, concern over sovereign debt has the potential to impact Fixed Interest markets while economic growth in emerging markets may have a flow on effect to local share markets. Page 5

6 02/ Investment options As a Telstra Super member you can choose from a broad range of investment options, covering all major asset classes, to suit the conservative through to the aggressive investor. You can choose to invest in: Growth, Balanced, Diversified Income, Defensive Growth, Conservative, Australian Shares, International Shares, Property, Fixed Interest, Cash or a combination of options. We also offer an investment option called Direct Access which provides access to some term deposits and ASX300 shares and other listed securities such as Exchange Traded Funds (ETFs), approved by us. Telstra Super has a MySuper arrangement with a lifecycle investment strategy. It consists of three age-based investment stages: MySuperGrowth for members aged under 45, MySuper Balanced for members aged 45 to under 65 and MySuper Conservative for members aged 65 and over. Investment option risk measures The Trustee seeks to satisfy the requirements of the Standard Risk Measure guidance released by the Association of Superannuation Funds of Australia (ASFA) and the Financial Services Council (FSC) in July 2011 by adopting the Standard Risk Measure (SRM) categories below. The SRM requires the reporting of risk by Risk Bands and Risk Labels. There are seven risk bands with risk labels ranging from Very Low to Very High. The risk bands relate to a measure of the estimated number of negative annual returns in a 20 year period (see page 7). Asset ranges Many investment options invest in different asset classes within a certain range. We use the asset ranges to take advantage of market opportunities and vary the levels of investment in each asset class from time to time. The asset ranges are displayed in brackets next to the target investment mix for these options on pages 8 to 21. Varying the investment mix within these ranges may also cause the split between growth and financial assets to vary from the target investment mix from time to time. Changes to our investment options We monitor our investment options and managers on a regular basis. We may close or change any investment option at any time. You will be given notice of any such changes, should they occur. The following pages outline each option to help you think about your future and the way your money can grow over time. Page 6

7 ASFA/FSC Standard Risk Measure (SRM) categories Risk Label Risk Band Estimated number of negative annual returns over any 20 year period Very Low 1 Less than 0.5 Low to less than 1 Low to Medium 3 1 to less than 2 Medium 4 2 to less than 3 Medium to High 5 3 to less than 4 High 6 4 to less than 6 Very High 7 6 or greater The SRM categories detailed above are applied to each investment option in this Guide. Page 7

8 Growth option Objective To build an investment portfolio to achieve the stated return within the stated risk parameters over the specified timeframe. Who should invest? This option involves a higher level of risk to achieve greater returns over the longer term. As a result, the value of your investment may rise or fall in the short term. Return objective Outperform CPI+3.5%p.a. Investment timeframe 7 10 years. Risk objective A high level of risk generating 4 to less than 6 negative annual returns over any 20 year period. Long-term investment mix* 89% growth assets, 11% defensive assets. Investment strategy Strong bias towards growth assets, such as Australian and International Shares, and Property, with a smaller allocation towards defensive assets such as Fixed Interest Securities and Cash. Investment mix and asset ranges International Shares 35% (20-55%) Australian Shares 35% (20-55%) Property 10% (0-25%) Hedge Funds 5% (0-20%) Infrastructure 5% (0-15%) Private Equity 4% (0-15%) Australian Fixed Interest 3% (0-15%) Cash 3% (0-20%) Opportunities 0% (0-10%) International Fixed Interest 0% (0-15%) Credit 0% (0-10%) Income Securities 0% (0-10%) The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members reasonably need to understand the fund's investments and reflect the manner in which objectives and strategies have been formulated by the Trustee pursuant to superannuation law and discretionary powers under the fund's Trust Deed. * The long-term investment mix is used as a strategic guide for investing. The split of defensive and growth assets can vary from time to time as investment in each asset class may vary within the allowable ranges. Page 8

9 Balanced option Objective To build an investment portfolio to achieve the stated return within the stated risk parameters over the specified timeframe. Who should invest? This option suits those who are seeking growth but who wish to lower the risk of rapid changes in value over the short term. This option is designed to provide lower levels of risk and return than the Growth option, but higher returns than the Conservative and Cash options. Return objective Outperform CPI+3%p.a. Investment timeframe 5 10 years. Risk objective A high level of risk generating 4 to less than 6 negative annual returns over any 20 year period. Long-term investment mix* 73.5% growth assets, 26.5% defensive assets. Investment strategy The Balanced option has a moderate bias towards growth assets, such as Australian and International Shares, and Property, balanced by an allocation towards defensive assets such as Fixed Interest Securities and Cash. Investment mix and asset ranges Australian Shares 28% (15-50%) International Shares 27% (15-50%) Property 10% (0-25%) Australian Fixed Interest 9% (0-25%) International Fixed Interest 5% (0-25%) Infrastructure 5% (0-15%) Private Equity 4% (0-15%) Cash 4% (0-25%) Hedge Funds 4% (0-15%) Credit 2% (0-10%) Income Securities 2% (0-10%) Opportunities 0% (0-10%) The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members reasonably need to understand the fund's investments and reflect the manner in which objectives and strategies have been formulated by the Trustee pursuant to superannuation law and discretionary powers under the fund's Trust Deed. * The long-term investment mix is used as a strategic guide for investing. The split of defensive and growth assets can vary from time to time as investment in each asset class may vary within the allowable ranges. Page 9

10 Diversified Income option Objective To build an investment portfolio to achieve the stated return within the stated risk parameters over the specified timeframe and to produce a distributable income above the cash rate over the medium term, while protecting the value of capital. Who should invest? Members who are looking for an income stream, while still achieving some growth on their initial investment capital. A minimum investment of $100,000 applies. Investment strategy The Diversified Income option is uniquely structured to distribute income it receives from investments, allowing members to fund part of their retirement needs without the need to sell capital assets. When selecting investments, preference is made for expected returns predominately driven by income rather than capital growth. Income is accrued as underlying investments pay income distributions during the month. Due to the varying income distributions of the underlying investments, the income payment to members will vary from month to month. Return objective Outperform CPI+2%p.a. Investment timeframe 4-6 years. Risk objective A high level of risk generating 4 to less than 6 negative annual returns over any 20 year period. Long-term investment mix* 55% growth assets, 45% defensive assets. Investment mix and asset ranges Australian Shares 30% (15-55%) Income Securities 10% (0-30%) Cash (includes term deposits) 10% (0-50%) Australian Fixed Interest 10% (0-40%) Property 10% (0-20%) Infrastructure 10% (0-20%) International Shares 10% (0-25%) Credit 10% (0-30%) Opportunities 0% (0-10%) The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members reasonably need to understand the fund's investments and reflect the manner in which objectives and strategies have been formulated by the Trustee pursuant to superannuation law and discretionary powers under the fund's Trust Deed. * The long-term investment mix is used as a strategic guide for investing. The split of defensive and growth assets can vary from time to time as investment in each asset class may vary within the allowable ranges. Page 10

11 Defensive Growth option Objective To build an investment portfolio to achieve the stated return within the stated risk parameters over the specified timeframe. Who should invest? Members who want to enjoy moderate growth with greater security. This option is designed to give more flexibility for members who might be looking to access their super in the short or medium term and want to continue participating in capital growth. Return objective Outperform CPI+2%p.a. Investment timeframe 2 6 years. Risk objective A medium to high level of risk generating 3 to less than 4 negative annual returns over any 20 year period. Long-term investment mix* 55% growth assets, 45% defensive assets. Investment strategy The Defensive Growth option is uniquely structured to adjust its exposure to a range of growth and defensive assets, based on the performance and confidence of investment markets at any point in time. Investment mix and asset ranges Australian Shares 25% (0-50%) International Shares 15% (0-40%) Income Securities 10% (0-40%) Credit 10% (0-40%) Australian Fixed Interest 10% (0-30%) Infrastructure 10% (0-30%) Property 10% (0-30%) International Fixed Interest 5% (0-30%) Cash 5% (0-30%) Opportunities 0% (0-10%) The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members reasonably need to understand the fund's investments and reflect the manner in which objectives and strategies have been formulated by the Trustee pursuant to superannuation law and discretionary powers under the fund's Trust Deed. * The long-term investment mix is used as a strategic guide for investing. The split of defensive and growth assets can vary from time to time as investment in each asset class may vary within the allowable ranges. Page 11

12 Conservative option Objective To build an investment portfolio to achieve the stated return within the stated risk parameters over the specified timeframe. Who should invest? Those who are close to retirement or who want to maintain some growth, with a lower risk of capital loss than the Balanced or Growth options. Investment strategy The Conservative option has a bias towards defensive assets, in particular a high weighting towards Cash, to minimise short-term fluctuations (risk) but has some exposure to growth assets for long-term growth (return). Return objective Outperform CPI+1.5%p.a. Investment timeframe 3 10 years. Risk objective A medium level of risk generating 2 to less than 3 negative annual returns over any 20 year period. Long-term investment mix* 38.5% growth assets, 61.5% defensive assets. Investment mix and asset ranges Australian Fixed Interest 25% (0-40%) Cash 20% (10-50%) International Fixed Interest 15% (0-40%) Australian Shares 15% (5-25%) International Shares 12% (5-25%) Property 10% (0-20%) Infrastructure 3% (0-15%) Hedge Funds 0% (0-15%) Opportunities 0% (0-10%) Private Markets 0% (0%) The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members reasonably need to understand the fund's investments and reflect the manner in which objectives and strategies have been formulated by the Trustee pursuant to superannuation law and discretionary powers under the fund's Trust Deed. * The long-term investment mix is used as a strategic guide for investing. The split of defensive and growth assets can vary from time to time as investment in each asset class may vary within the allowable ranges. Page 12

13 International Shares option Objective To build an investment portfolio to achieve the stated return within the stated risk parameters over the specified timeframe. Who should invest? Those who want to achieve potentially higher returns in the long term through exposure to International Shares, while being willing to accept a higher level of volatility in returns. Return objective Outperform CPI+4%p.a. Investment timeframe 8 10 years. Risk objective A high level of risk generating 4 to less than 6 negative annual returns over any 20 year period. Long-term investment mix 100% growth assets. Investment strategy The International Shares option has 100% exposure to International Shares, and is invested through several investment managers. It aims to achieve exposure to industries and companies that are not part of the Australian market. Investment mix and asset ranges International Shares 100% The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members reasonably need to understand the fund's investments and reflect the manner in which objectives and strategies have been formulated by the Trustee pursuant to superannuation law and discretionary powers under the fund's Trust Deed. Page 13

14 Australian Shares option Objective To build an investment portfolio to achieve the stated return within the stated risk parameters over the specified timeframe. Who should invest? Those who want to achieve potentially higher returns in the long term through exposure to Australian shares, while being willing to accept a higher level of volatility in returns. Return objective Outperform CPI+4%p.a. Investment timeframe 8 10 years. Risk objective A very high level of risk generating 6 or more negative annual returns over any 20 year period. Long-term investment mix 100% growth assets. Investment strategy 100% of the option is invested in Australian companies.diversification is achieved through exposure to a number of investment managers with different styles of investing. Investment mix and asset ranges Australian Shares 100% The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members reasonably need to understand the fund's investments and reflect the manner in which objectives and strategies have been formulated by the Trustee pursuant to superannuation law and discretionary powers under the fund's Trust Deed. Page 14

15 Property option Objective To build an investment portfolio to achieve the stated return within the stated risk parameters over the specified timeframe. Who should invest? Those who accept that this option involves a moderate level of risk to achieve income returns and capital growth over the longer term. Return objective Outperform CPI+3%p.a. Investment timeframe 5 7 years. Risk objective A medium to high level of risk generating 3 to less than 4 negative annual returns over any 20 year period. Long-term investment mix 100% growth assets. Investment strategy The Property option invests exclusively in property-based assets, including both listed property and direct property. For diversification reasons, this may include investment in international property and mortgages or loans secured by property assets. Investment mix and asset ranges Property 100% The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members reasonably need to understand the fund's investments and reflect the manner in which objectives and strategies have been formulated by the Trustee pursuant to superannuation law and discretionary powers under the fund's Trust Deed. Page 15

16 Fixed Interest option Objective To build an investment portfolio to achieve the stated return within the stated risk parameters over the specified timeframe. In the short-term, returns can be negative from time to time. Who should invest? Those who are seeking a lower risk option who wish to generate income returns. Generally provides lower risk and returns than shares. Investment strategy The Fixed Interest option invests primarily in Australian and International Fixed Interest Securities, including fixed, variable and floating interest rate securities issued by government bodies and companies, as well as asset and mortgage-backed securities and mortgages or loans secured by property assets. It may also have exposure to Cash, up to a maximum of 50%. Return objective Outperform CPI. Investment timeframe 2 4 years. Risk objective A low to medium level of risk generating 1 to less than 2 negative annual returns over any 20 year period. Long-term investment mix 100% defensive assets. Investment mix and asset ranges Australian Fixed Interest 80% (50-100%) International Fixed Interest 20% (0-50%) Cash 0% (0-50%) The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members reasonably need to understand the fund's investments and reflect the manner in which objectives and strategies have been formulated by the Trustee pursuant to superannuation law and discretionary powers under the fund's Trust Deed. Page 16

17 Cash option Objective To build an investment portfolio to achieve the stated return within the stated risk parameters over the specified timeframe. Who should invest? Those who require access to cash in the short term or who are seeking a secure, very low risk investment. Investment strategy 100% invested in Cash and short term money market securities. Return objective Outperform CPI. Investment timeframe 0 2 years. Risk objective A very low level of risk generating less than 0.5 negative annual returns over any 20 year period. Long-term investment mix 100% defensive assets. Investment mix and asset ranges Cash 100% The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members reasonably need to understand the fund's investments and reflect the manner in which objectives and strategies have been formulated by the Trustee pursuant to superannuation law and discretionary powers under the fund's Trust Deed. Page 17

18 Direct Access option Objective To provide members with the choice and flexibility to manage part of their super. Who should invest? Those who are comfortable taking an active role managing their super investment. Investment strategy Allows members to invest a proportion of their super in their choice of: Australian shares that form part of the S&P/ASX 300 Index other listed securities such as Exchange Traded Funds (ETFs), approved by the Trustee a range of approved term deposits. Return objective The return objective will depend on the mix of investments selected by individual members. Investment timeframe The minimum suggested timeframe will depend on the investments selected by individual members. The minimum suggested timeframes that generally apply to the investments in the Direct Access option are: term deposits: 2 years or less listed securities and Australian shares that form part of the S&P/ASX 300 Index: 8-10 years. Risk objective The risk level will depend on the mix of investments selected by individual members. The risk levels that generally apply to the investments in the Direct Access option are: term deposits: very low risk listed securities such as ETFs, and Australian Shares that form part of the S&P/ASX 300 Index: very high risk The likelihood of a negative return will vary depending on each member s allocation to shares and term deposits and other listed securities, and the performance of the investments selected by individual members. Long-term investment mix The mix of growth and defensive assets will depend on the mix of investments selected by individual members. The growth/defensive characteristics that generally apply to the investments in the Direct Access option are: term deposits: defensive assets listed securities and Australian shares that form part of the S&P/ASX 300 Index: growth assets. Page 18

19 MySuper Growth Objective To build an investment portfolio to achieve the stated return within the stated risk parameters over the specified timeframe. Who should invest? This investment stage involves a higher level of risk to achieve greater returns over the longer term. As a result, the value of your investment may rise or fall in the short term. Return objective Outperform CPI+3.5%p.a. Investment timeframe 7 10 years. Risk objective A high level of risk generating 4 to less than 6 negative annual returns over any 20 year period. Long-term investment mix* 89% growth assets, 11% defensive assets. Investment strategy Strong bias towards growth assets, such as Australian and International Shares, and Property, with a smaller allocation towards defensive assets such as Fixed Interest Securities and Cash. Investment mix and asset ranges International Shares 35% (20-55%) Australian Shares 35% (20-55%) Property 10% (0-25%) Hedge Funds 5% (0-20%) Infrastructure 5% (0-15%) Private Equity 4% (0-15%) Australian Fixed Interest 3% (0-15%) Cash 3% (0-20%) Opportunities 0% (0-10%) International Fixed Interest 0% (0-15%) Credit 0% (0-10%) Income Securities 0% (0-10%) The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members reasonably need to understand the fund's investments and reflect the manner in which objectives and strategies have been formulated by the Trustee pursuant to superannuation law and discretionary powers under the fund's Trust Deed. * The long-term investment mix is used as a strategic guide for investing. The split of defensive and growth assets can vary from time to time as investment in each asset class may vary within the allowable ranges. Page 19

20 MySuper Balanced Objective To build an investment portfolio to achieve the stated return within the stated risk parameters over the specified timeframe. Who should invest? This investment stage suits those who are seeking growth but who wish to lower the risk of rapid changes in value over the short term. This investment stage is designed to provide lower levels of risk and return than the MySuper Growth investment stage, but higher returns than the MySuper Conservative investment stage and Cash option. Australian and International Shares, and Property, balanced by an allocation towards defensive assets such as Fixed Interest Securities and Cash. Return objective Outperform CPI+3%p.a. Investment timeframe 5-10 years. Risk objective A high level of risk generating 4 to less than 6 negative annual returns over any 20 year period. Long-term investment mix* 73.5% growth assets, 26.5% defensive assets. Investment strategy MySuper Balanced has a moderate bias towards growth assets, such as Investment mix and asset ranges Australian Shares 28% (15-50%) International Shares 27% (15-50%) Property 10% (0-25%) Australian Fixed Interest 9% (0-25%) International Fixed Interest 5% (0-25%) Infrastructure 5% (0-15%) Private Equity 4% (0-15%) Cash 4% (0-25%) Hedge Funds 4% (0-15%) Credit 2% (0-10%) Income Securities 2% (0-10%) Opportunities 0% (0-10%) The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members reasonably need to understand the fund's investments and reflect the manner in which objectives and strategies have been formulated by the Trustee pursuant to superannuation law and discretionary powers under the fund's Trust Deed. * The long-term investment mix is used as a strategic guide for investing. The split of financial and growth assets can vary from time to time as investment in each asset class may vary within the allowable ranges. Page 20

21 MySuper Conservative Objective To build an investment portfolio to achieve the stated return within the stated risk parameters over the specified timeframe. Who should invest? Those who are close to retirement or who want to maintain some growth, with a lower risk of capital loss than the MySuper Balanced or MySuper Growth options. Return objective Outperform CPI+1.5%p.a. Investment timeframe 3 10 years. Risk objective A medium level of risk generating 2 to less than 3 negative annual returns over any 20 year period. Long-term investment mix* 38.5% growth assets, 61.5% defensive assets. Investment strategy MySuper Conservative has a bias towards defensive assets, in particular a high weighting towards Cash, to minimise short term fluctuations (risk) but has some exposure to growth assets for long term growth (return). Investment mix and asset ranges Australian Fixed Interest 25% (0-40%) Cash 20% (10-50%) International Fixed Interest 15% (0-40%) Australian Shares 15% (5-25%) International Shares 12% (5-25%) Property 10% (0-20%) Infrastructure 3% (0-15%) Hedge Funds 0% (0-15%) Opportunities 0% (0-10%) Private Markets 0% (0%) The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members reasonably need to understand the fund's investments and reflect the manner in which objectives and strategies have been formulated by the Trustee pursuant to superannuation law and discretionary powers under the fund's Trust Deed. * The long-term investment mix is used as a strategic guide for investing. The split of financial and growth assets can vary from time to time as investment in each asset class may vary within the allowable ranges. Page 21

22 03/ Choosing an investment option You can invest in an option, including our MySuper arrangement, that best suits your age, timeframe, financial plans, appetite for return and your tolerance for risk. Pages 8 to 21 of this guide outline our investment options, their investment timeframes, and their associated levels of risk and return. Our MySuper arrangement is a lifecycle investment strategy consisting of three investment stages: MySuper Growth for members aged under 45, MySuper Balanced for members age 45 to under 65 and MySuper Conservative for members age 65 and over. MySuper members will have their balance invested in the relevant age-based investment stage shown in the table to the right. As the member ages, their super will automatically be moved to the relevant age-based investment stage, without incurring a buy-sell spread. If you do not choose an investment option(s) when you first become a Telstra Super accumulation member, you re automatically placed in the relevant MySuper investment stage*. Member age Under to under and over MySuper arrangement MySuper Growth MySuper Balanced MySuper Conservative We will advise you in writing whenever new investment options are introduced, or when changes are made to the existing options. Buy-sell spreads A buy-sell spread is a fee to recover transaction costs incurred by the trustee of the superannuation entity in relation to the sale and purchase of assets of the entity. Diversify your investment to help minimise risk Diversification simply means spreading risk. It can be achieved by placing your investment in a mix of growth and defensive assets, such as shares, Fixed Interest, Property and Cash. In this way, when one asset is not performing as well as expected, the other assets in your portfolio may help to balance the overall return. You have heard the saying, do not put all your eggs in one basket. Apply this concept to investing and it can help reduce the impact of negative returns on your investment. We also achieve diversification by selecting a wide range of specialist investment managers. This means that different specialists in each asset class manage your money, which also helps spread the risk. Each manager is carefully chosen to provide competitive performance as well as specialist skills in particular markets. You can find a full list of our investment managers on our website. * Except members who transferred to Telstra Super Corporate Plus as part of the Telstra 2014 Super Offer. Page 22

23 Choosing a mix of investment options Members can individually tailor their investment by choosing a mix of investment options, as shown in the example to the right. When you have invested across a mix of investment options, investment earnings depend on the combination of options you choose. We do not guarantee that a mixture of any two or more investment options will provide earnings consistent with the performance of the investment options designed by us. Investment earnings for each option will be applied to your account balance via the unit price. We do not balance your account to keep your chosen split. Income returns (net of fees and taxes) for the Diversified Income option are distributed on a monthly basis* and used to purchase Cash investment option units at that time. Telstra Super RetireAccess members are able to draw down this income as part of their pension payment, reducing the need to sell capital to fund their retirement, or they can choose to re-invest the Cash units in another investment option. Accumulation members are also able to re-invest the Cash units in another investment option. The total income earned for the month is applied within seven business days of the following month. If a full withdrawal is made before the month end, no income distribution will take place for that month. Instead, the withdrawal benefit will be inclusive of income accrued at the time of redemption. You should consider seeking financial advice from Telstra Super Financial Planning. To discuss your advice needs, please call Telstra Super Financial Planning on between 8.30am and 5.30pm (Melbourne time), Monday to Friday. * Subject to investment performance. ^ Investment switches can be made based on percentage or dollar amount. Switches to and from Direct Access must be made through SuperOnline and for dollar amounts only. Example Sally has $100,000 in her super account and would like to divide it between a mixture of investment options, which she can do by allocating specific percentages to the options of her choice. The following table shows how Sally allocates her money by percentage splits. Investment option/mysuper Percentage Growth - Balanced 40% Diversified Income - Defensive Growth - Conservative - International Shares 50% Australian Shares - Property - Fixed Interest - Cash 10% Direct Access^ - Cash Transaction Account - Term Deposits - Listed securities (including shares and Exchange Traded Funds) MySuper Total 100% The mix will change as investment earnings accrue and income payments are made. Sally should therefore be careful to review her choice regularly to ensure that her mixed option selection remains appropriate. Page 23

24 Changing your investment option If you would like to change your investment options, you can do so securely in SuperOnline. Alternatively, you can change your investment choice by completing and returning to us an Investment Choice form available at or by calling us. You may change your investment option(s) at any time. Investment switching will incur buy-sell costs. For more information on buy-sell spreads see the Additional Information About Your Super Guide available at Changing your investment option will also affect how investment returns are allocated to your account. The earning rate of your current investment option will apply until the effective day, which is the day earnings are applied to your updated investment choice. However, we reserve the right to adjust the earning rate to appropriately reflect market movements and equity among members. Applying investment returns to your account Investment returns/earnings are applied to your account according to your chosen investment option(s). We declare daily unit prices for the purpose of applying investment returns to your account. The unit price applied depends upon your account activity and the effective day for transactions. For more information on how your account works, see the How your super account works section in our Additional Information About Your Super Guide available at Investment option switches will be processed at the sell unit price (out of the current investment option(s)) and the buy unit price (into the selected investment option(s)) applicable to the day the switch took place. We must receive investment option switches before 5.30pm on a Victorian business day in order for them to be transacted at that day s declared buy and sell unit prices. Unit prices for a particular day are declared on the following Victorian business day. If received after 5.30pm the switches will be transacted using the next day s buy and sell unit prices. The effective day will therefore depend on precisely when your instructions are received. A Victorian business day is from Monday through Friday (inclusive) and excludes any day that falls on a national holiday or Victorian public holiday. Page 24

25 04/ Risks of super Like any investment, there are risks associated with investing your super. The significant risks of investing in super include: Risk Inflation risk Individual investment risk Market risk Interest rate risk Hedging risk (currency) Derivative risk Changes to law Manager risk Description Inflation may exceed the return on your investment, reducing its real value. The investment option you choose may drop in value. Changes in investment markets due to economic or political factors may occur, possibly causing changes in your investments and returns. Changes to interest rates may impact on investment returns. We invest in overseas investments, for example International Shares, and if the currency of those countries rises or falls, or if the Australian dollar rises or falls, the value of your investment may change. We use derivatives to reduce risk, reduce transaction costs and as an efficient way to gain exposure to certain asset classes, including Australian and International Shares and Fixed Interest. Derivatives are not used for speculative purposes or for gearing. Risk associated with derivatives includes the value of the derivative falling, which may affect your investments. We aim to minimise derivative risk by constantly monitoring our contracts and by entering into derivative contracts with reputable parties. Super and tax laws change often and these changes may affect your investment. The risk an investment manager will not perform to expectation (which might put your investments at risk). Our manager risk is reduced through using a diverse range of specialist investment managers chosen to provide competitive performance as well as specialist skills. Performance is carefully monitored and managed. 05/ Labour standards, environmental, social and ethical considerations We believe that incorporating environmental, social and governance (ESG) considerations into investment decision making is part of good risk management and making better investment decisions. Telstra Super therefore has a preference for investments with good ESG credentials provided there is no compromise on expected risk-adjusted returns for the portfolio. We understand this issue is of interest to some of our members. For further information, please view our Sustainable Investment Policy available at au/sustainability Page 25

26 06/ Stay informed More information and helpful articles about investing your retirement savings are available on our website. We also publish an newsletter, 10 dots, which includes news and updates on investment performance and the options available to Telstra Super members. Subscribe today at Page 26

YOUR INVESTING SUPER. 1 July 2015 IMPORTANT INFORMATION This information should be read in conjunction with the First Super Product Disclosure Statement (PDS) dated 1 July 2015. You should consider this

ADF Super Australian Defence Force Superannuation Investment options and Issued 2 June 2016 The information in this document forms part of the Product Disclosure Statement for the Australian Defence Force

Investment Options and Risk Issued 1 July 2013 The information in this document forms part of the Product Disclosure Statement for the Public Sector Superannuation accumulation plan (PSSap), sixth edition,

Investment options and risk Issued 1 November 2013 The information in this document forms part of the Product Disclosure Statement for the Public Sector Superannuation Scheme (PSS), seventh edition, issued

Investment guide Personal Division This guide contains important information about your NSF Super investment options. You should read it to help you make an informed investment choice. Contents 1. Investment

Investment options and risk Issued 1 July 2015 The information in this document forms part of the Product Disclosure Statement for the Public Sector Superannuation accumulation plan (PSSap), eighth edition,

Fact sheet Demystifying fixed income investments Super fund members as well as individual investors have a huge range of options to choose from for the investment of their savings. Fixed income investments

1 JULY 2015 Investment Guide INDUSTRY, CORPORATE AND PERSONAL DIVISIONS Your investment choice TWUSUPER was established in 1984 as the Industry SuperFund for people in transport and logistics. By understanding

Investment Options and Risk Issued 1 July 2013 The information in this document forms part of the Product Disclosure Statement for the Military Superannuation and Benefits Scheme (MilitarySuper), third

Investment options and risk Issued 1 November 2013 The information in this document forms part of the Product Disclosure Statement for the Commonwealth Superannuation Scheme (CSS), sixth edition, issued

The information in this document forms part of the Australian Catholic Superannuation and Retirement Fund Superannuation Plan Product Disclosure Statement dated 1 January 2016. If you would like a hard

Investment Guide Effective 1 October 2015 The information in this document forms part of the Product Disclosure Statement (PDS) for REST Super, REST Corporate, REST Select and Acumen effective 1 October

SUP E R ANNUATION Investment choice GESB Super and West State Super Important note The information in this document forms part of the Product Information Booklets for GESB Super and West State Super, each

Russell iq Super Employer Division General Division 1 July 2015 JUMP TO 1. Risks of superannuation 3 2. How we invest your money 5 The information in this document provides additional information to the

How we invest your money VicSuper FutureSaver Member Guide Date prepared 1 July 2016 VicSuper s investment policy The information in this document forms part of the VicSuper FutureSaver Product Disclosure

Version 4.0 Preparation Date: 2 November 2009 This document provides some additional information to help you understand the financial planning concepts discussed in the SOA in relation to investment concepts.

National Margin Lending Make your investment portfolio work for you Contents What is Margin Lending? 3 Why choose National Margin lending? 5 Why gear? 6 How much can you borrow with National Margin Lending?

Issue date: 1 July 2016 and costs Industry super funds like REI Super are run only to benefit members, which means they charge low fees and return all investment earnings to members accounts. Did you know?

How we invest your money Employer-sponsored and personal superannuation members. This document was prepared on 3 August 2015. The information in this document forms part of the Statewide product disclosure

Investment Guide 3 August 2016 The information in this document forms part of the MTAA Super Member Product Disclosure Statement (PDS) dated 3 August 2016. You should consider the information in this document

> Understanding your in super doesn t have to be hard. You don t need to be a financial whiz to make it work for you! You just need to understand your options and how you can make the most of them. This

Options and Risk Issued 1 March 2013 The information in this document forms part of the Product Disclosure Statement for the Public Sector Superannuation accumulation plan (PSSap), fifth edition, issued

Version 4.2 This document provides some additional information to help you understand the financial planning concepts discussed in the SOA in relation to. Important information This document has been published

1 Understanding your investment in super doesn t have to be hard. You don t need to be a financial whiz to make it work for you! You just need to understand your options and how you can make the most of

Funds in Court Information Guide INVESTMENT RISKS NOTE: The information in this document is for information purposes only. The information is not intended to be and does not constitute financial advice

MERCER DIRECT MEMBER GUIDE 23 JULY 2014 FLEXIBILITY, CHOICE AND CONTROL Mercer Direct gives Mercer Super Trust members greater control over their investments through a direct investment service. You can

Managed Investment Funds Product Disclosure Statement A range of funds that allows you to create an investment portfolio that suits your individual needs This is a combined Financial Services Guide and

Investment booklet Issued 1 October 2014 The information in this document forms part of the Product Disclosure Statement for Club Plus Super Industry and Personal Division dated 1 October 2014. A Member

Investment Guide Date of issue: 5 October 2015 mtaasuper.com.audate Phone: 1300December 362 415 2014 of issue: The information in this document forms part of the Product Disclosure Statement for MTAA Super

BT Lifetime Super Employer Plan Part 2 - Additional Information Booklet Part 2 Dated: 1 September 2016 Last updated: 1 September 2016 About this Additional Information Booklet This document is Part 2 of

UNDERSTANDING INVESTMENT RISK Important information This information is of a general nature only and is not intended to constitute personal advice. It does not take into account your particular investment

INVESTMENT OPTIONS INTRODUCTION An investor is faced with a myriad of investment options both simple and complex and not all investment options suit all investors. We recommend seeking professional advice

ADVANCE INVESTMENT FUNDS Additional Information Booklet Issued: 6 July 2016 Contact details If you have any questions or would like more information about Advance Asset Management Limited (ABN 98 002 538

Asset classes explained The ups and downs in financial markets have made many investors uneasy about investing in riskier assets. In such times, it often helps to take a step back and consider each asset

BT Investment Funds Product Disclosure Statement Dated 1 July 2013 We recommend that you read this Product Disclosure Statement (PDS) in full before making an investment decision. If you have not received

By Michael Lannon Back to Basics Understanding s Last year was a good year for investors in the share market. However it is important to not lose sight of the basics of investment. This month we look at

7 investments to earn better than bank interest from the stockmarket. If low tide on interest rates has left you looking for better returns, the stockmarket may be an alternative. Sentinel Stockbroking